An economist says a lack of information about COVID-19 drove the world into a deep economic crisis — here's how we can fix it
- Joshua Gans is a professor of strategic management and economist at the University of Toronto's Rotman School of Management.
- The following is an
excerptfrom his book, "The Pandemic Information Gap: The Brutal Economics of COVID-19."
- In it, he argues that the
pandemicwas caused by a lack of information and knowledge about COVID-19— not the virus itself.
- Gans believes the focus of the pandemic should be about understanding the information problem, and knowing critical facts at every phase of pandemic recovery to suppress future outbreaks.
Returning to the present, there will come a point in the COVID-19 panic that we will declare victory. At the time of writing, we do not know when that point will be. We do not know the number of deaths the outbreak will cause. We do not know how and whether the economy will bounce back soon after. We do not know whether life will be again regarded as normal. But, right now, for reasons I cannot fully explain, I am confident that there will be a point where we will collectively believe COVID-19 has been conquered.
Then, sadly, the trouble begins. Victory is a dangerous thing. It comes with relief. It comes with exhaustion. It comes with hope that we are done. Therein lies the danger.
World War I was called "the war to end all wars."
The victors went back home and were done. For France, this was especially so. They were finished but had also decided to make huge investments to give them a sense of security. They envisaged and then built an incredible series of fortifications along the entire border with Germany. Basically, it was a low-level mountain range with tracks to move troops, 100 miles of tunnels, barracks, and even air conditioning. The Maginot Line would protect France from a direct assault. Half a million troops could be embedded there. No army would try to breach it.
That, of course, was understood by all. If the Germans attacked, they would have to go through the Netherlands and Belgium (or maybe Switzerland). The French plan was to meet the invading force in those countries, which seemed secure.
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But as with all such things, there were weak links.
Belgium decided to stay neutral in World War II. More critically, when the Germans were still preoccupied in the east against Poland, the French army chose not to cross the Maginot Line and preemptively attack. Their
The idea that success can breed the seeds of its own destruction is not a new one.
In management, the term "disruption" describes the situation where successful businesses cannot adopt new technologies because they continue to do the things that made them successful in the first place. Precisely why it happens and whether it is stupid, complacent, or can be "rationalized" is not material at this point. If and when we are victorious against COVID-19, whatever is driving that phenomenon will likely be present again.
It is also worth noting that, in many respects, COVID-19 was a somewhat "lucky" pandemic. SARS-CoV-2 was far less transmissible than its SARS predecessor or the measles, making it likely that walking outdoors was relatively safe. It did not lead to contaminated food. It appeared to be relatively genetically stable. And it left children (and many others) mostly unaffected. There was no reason for all of those things to have happened. And so, there is no reason to predict that they will be absent in a future pandemic. But there is reason to be worried that we may forget that once we are done with the current crisis.
To build the global institutions needed to mitigate the costs of future pandemics, we will need that resolve. There are signs of hope. The Gates Foundation's move to build manufacturing facilities for seven vaccine candidates, knowing only one or two would be viable, to save months of time is an example. That is what resolve looks like.
More critically, however, we need to take the lessons from understanding the pandemic information problem. Put simply, the experience we had during COVID-19 reinforces the notion that, with early action and a capacity to gather the right information quickly, comes the option of suppressing any viral outbreak rather than allowing the health and economic harm COVID-19 has heaped on many economies. The lesson is that pandemics are manageable. It was done with SARS and MERS, and countries like Vietnam, Mongolia, South Korea, Iceland, and Taiwan did it with COVID-19. The tragedy is their approach was not followed worldwide. How to ensure that it is, is our challenge going forward.
Any victory we have over the next two years needs to come with a warning. The eye cannot be taken off the ball. And if you need any guide from history, remember that we did not get the IMF or the United Nations until we had not one but two world wars.
From the book "The Pandemic Information Gap: The Brutal Economics of COVID-19" by Joshua Gans. Copyright © 2020 Joshua Gans. Reprinted by permission of The MIT PRESS, Cambridge, MA. All rights reserved.
Joshua Gans is a professor of strategic management and holds the Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship at the University of Toronto's Rotman School of Management.
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